Outsourcing of NCTD’s bus services is approved

Calling the vote a milestone in the history of North County Transit District, board members unanimously approved a seven-year contract yesterday that outsources the financially-troubled district’s bus and maintenance operations.

The district will pay Ohio-based First Transit more than $178 million to take over bus operations beginning July 1. Officials said the cost of the contract is $70 million less than the district would spend to keep the operations in-house.

The contract calls for maintaining current bus service and giving top hiring priority to current district employees.

“This is a historic day for North County Transit District,” said board member Sam Abed, an Escondido city councilman. “We have done it in a thoughtful way. We are saving taxpayer dollars and saving employee jobs.”

Although a few bus drivers sat in the audience, none addressed the board. There was no point in lobbying a panel poised to approve the deal, said Jessie Perez, union business manager for Teamsters Local 542, which represents the district’s bus and maintenance workers.

“Morale is very low,” Perez said after the meeting. “These drivers and maintenance guys have been put through a lot of uncertainty and stress.”

The district had been pursuing the outsourcing since July, when it became clear that two years of budget troubles were worsening.

The contract with First Transit means the district will no longer directly operate any of its services.

It now outsources its passenger train lines, with TransitAmerica Services operating the Coaster, and Veolia Transportation running the Sprinter. First Transit already handles the district’s LIFT bus service for the disabled.

The district has taken financial body blows for two years because of the recession. Since 2008, it has been forced to raise fares, cut services and lay off 39 workers, and currently employs about 480 people, district spokeswoman Sarah Benson said.

“No one working today has seen a downturn of this magnitude in their working lives,” finance Director Richard Hannasch told the board yesterday.

The district has lost $10 million in annual state funding, probably for five years, as Sacramento faces its own fiscal crisis. The district also expects to lose an anticipated $16 million in sales tax revenue and $1.7 million in fares this year, Hannasch said.

Sales-tax-related revenues account for about 45 percent of this year’s $88 million budget, while fares cover about 22 percent. Federal grants make up much of the remaining funding.

First Transit, which will bring in its own top managers, is required to negotiate a contract with the union. It expects to employ 241 bus drivers and 84 fleet and maintenance workers, compared with the 236 drivers and 121 maintenance workers now at the district.

District Executive Director Matt Tucker said First Transit must pay a minimum of $12 per hour, including benefits. Drivers now earn $14 to $21.65 an hour.